Summit State Bank (NASDAQ:SSBI) and Sound Financial Bancorp (NASDAQ:SFBC) Critical Review

Sound Financial Bancorp (NASDAQ:SFBC) and Summit State Bank (NASDAQ:SSBI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Valuation and Earnings

This table compares Sound Financial Bancorp and Summit State Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$61.52 million	1.85	$7.16 million	$2.77	16.00
Summit State Bank	$58.82 million	1.54	$6.80 million	$1.01	13.25

Sound Financial Bancorp has higher revenue and earnings than Summit State Bank. Summit State Bank is trading at a lower price-to-earnings ratio than Sound Financial Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Sound Financial Bancorp and Summit State Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	1	0	0	2.00
Summit State Bank	0	1	0	0	2.00

Volatility and Risk

Sound Financial Bancorp has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, Summit State Bank has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Insider and Institutional Ownership

68.9% of Sound Financial Bancorp shares are owned by institutional investors. 12.6% of Sound Financial Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Sound Financial Bancorp and Summit State Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	11.64%	6.70%	0.67%
Summit State Bank	11.55%	N/A	N/A

Summary

Sound Financial Bancorp beats Summit State Bank on 10 of the 11 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.